Great info. As an English major I take no umbrage because it is true to a point. However, the investment graveyard also has its share of bean counters. I'm a particular fan of Damodaran's book _ Narrative and Numbers_ you have to have a measure of both. The best opportunities often arise when the narrative has led too many to believe in near term risks like the S iphones or like Amazon's transition away from SunMicro in '03 when I got a little bit at 12 even though the risks in both cases were real the narrative and the general short term focus of most investors led to mispricing.
Ah yes, uncomfortable. Federighi and Srouji can't comfort retail investors, even though they explain in detail why Apple has a moat the size of Lake Huron.
Retail investors get nervous when bobble heads talk about rumors, or lack of a foldable phone, or their endless stream of correlations that have no predictive power at a time when the future is uncertain.
But I buried the lede, "increasing IB, increasing ARPU".
First, a lot of "investors" in high growth high multiple stocks are buying a story, not financials. It's lit major vs. math major. Whether they know it not, they're really buying into a ponzi scheme, relying on the bigger fool.
Second, high growth public stocks have one distinct advantage over the laundromat example. One can sell covered calls. Even today, with fear rampaging through the market every other day, out of the money calls carry signifiant premiums. With the Apple example, it's even better, one can sell out of the money puts far into the future, knowing buybacks increment tFCF by 4% (at today's prices) annually. By selling both, as a holder of AAPL, the fear and greed of others pays for a few luxuries. It also helps knowing that Apple has the best by far: chips, middleware, APIs, SKDs, 25,000,000 developers, plus the best ecosystem of growing IB of customers who love their products, growing ARPU, and supply chain. Hard times will hurt Apple competitors more than hard times would hurt Apple.
Great info. As an English major I take no umbrage because it is true to a point. However, the investment graveyard also has its share of bean counters. I'm a particular fan of Damodaran's book _ Narrative and Numbers_ you have to have a measure of both. The best opportunities often arise when the narrative has led too many to believe in near term risks like the S iphones or like Amazon's transition away from SunMicro in '03 when I got a little bit at 12 even though the risks in both cases were real the narrative and the general short term focus of most investors led to mispricing.
Ah yes, uncomfortable. Federighi and Srouji can't comfort retail investors, even though they explain in detail why Apple has a moat the size of Lake Huron.
Retail investors get nervous when bobble heads talk about rumors, or lack of a foldable phone, or their endless stream of correlations that have no predictive power at a time when the future is uncertain.
But I buried the lede, "increasing IB, increasing ARPU".
Two comments:
First, a lot of "investors" in high growth high multiple stocks are buying a story, not financials. It's lit major vs. math major. Whether they know it not, they're really buying into a ponzi scheme, relying on the bigger fool.
Second, high growth public stocks have one distinct advantage over the laundromat example. One can sell covered calls. Even today, with fear rampaging through the market every other day, out of the money calls carry signifiant premiums. With the Apple example, it's even better, one can sell out of the money puts far into the future, knowing buybacks increment tFCF by 4% (at today's prices) annually. By selling both, as a holder of AAPL, the fear and greed of others pays for a few luxuries. It also helps knowing that Apple has the best by far: chips, middleware, APIs, SKDs, 25,000,000 developers, plus the best ecosystem of growing IB of customers who love their products, growing ARPU, and supply chain. Hard times will hurt Apple competitors more than hard times would hurt Apple.
Is tFCF = true free cash flow? Sorry, i don't see where the "t" is defined and the linked article refers to FCF not tFCF. Thanks